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IP News Bulletin for Japan and China, July 2024

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July 2024
Contents
News about Sonoda & Kobayashi
1. Sonoda & Kobayashi holds webinar on Trademarks in the Metaverse on June

20 in collaboration with EU-Japan Centre for Industrial Cooperation and EUIPO
2. Sonoda & Kobayashi holds webinar on Divisional Applications in Japan on July23
JPO and CNIPA News
1. JPO updates data on trends in design registration applications
2. JPO participates in high level meeting of trial and appeal divisions of the 5major patent offices
3. CNIPA and China's Intellectual Property Court: Fortifying Global Innovation
Rights
4. CNIPA Reports: China Leads Global Generative AI Patents Surge
Latest IP News in Japan
1. IBM Settles Patent Lawsuit Against Rakuten Over E-commerce Technology
2. Automotive Industry Groups Challenge Avanci Over 5G Patent Licensing Terms

Latest IP News in China
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1. China leading generative AI patent applications, the UN reports
2. Qualcomm and Philips sue Chinese smartphone maker Transsion

IP Law Updates in Japan: Insights from Sonoda & Kobayashi
1. Trademarks in the Metaverse: Navigating New Challenges in Japan- News about Sonoda & Kobayashi 1. Sonoda & Kobayashi holds webinar on Trademarks in the Metaverse on June 20 incollaboration with EU-Japan Centre for Industrial Cooperation and EUIPO
On Thursday June 20th at 5 pm JST/10 am CET, in collaboration with the EU-Japan Centre
for Industrial Cooperation and the EUIPO, Sonoda & Kobayashi held a webinar on
Trademarks in the Metaverse. The webinar focused on bringing both a Japanese and EUperspective to the table, describing what classes and goods are appropriate for goods andservices in the metaverse, and advising on when applying for a trademark in these classes
would make sense in the first place. Yoko Sasaki, Japanese patent attorney, presented fromthe Japanese perspective. We would like to thank those who attended this online event.

2. Sonoda & Kobayashi holds webinar on Divisional Applications in Japan on July 23
On Tuesday the 23rd of July at 3 pm PDT/5 pm CST/6 pm EST, Sonoda & Kobayashi held awebinar on “Using Divisional Applications Effectively in Japan.” Yasuhide Nishimura, Yoko
Sasaki, and Sukanya Hummel walked attendees through divisional applications, and themethods and points to be aware of in obtaining patents that are starting to attract attention
in Japan today. We extend our thanks to attendees of this online event.

- JPO and CNIPA News 1. JPO updates data on trends in design registration applications
In July 2024, the JPO updated its data on the trends in design registration applications
since the amendment of the Design law on April 1st, 2020.
These changes in law provided for the protection of designs for images, buildings, andinteriors, and also allowed related design applications to be filed after the publication of thedesign gazette of the principal design.
Following these revisions, the JPO published design registration application trends. As of
July 4th, 2023, there were 5921 design registration applications filed for images, 1656 forbuildings, and 1074 for interiors. Of these, 4186, 1207 and 781 were registered,respectively.

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Further information can be found here. (Japanese)

2. JPO participates in high-level meeting of trial and appeal divisions of the 5 major
patent offices
In June 2024, representatives of the JPO travelled to Seoul, South-Korea, to take part in ahigh-level meeting of the trial and appeals divisions of the five major patent offices. Hosted
by the Korean Patent office (KIPO), the meeting was also attended by the American(USPTO), Chinese (CNIPA) and European (EPO) patent offices.
During the meeting, representatives from each office presented the latest trends in the trial
and appeal divisions. They also exchanged opinions on the use of artificial intelligence inoperations and on digitization. The JPO introduced its plans for digitization of trial andappeal procedures and its plans for the use of AI.
Further information can be found here. (Japanese)
3. CNIPA and China's Intellectual Property Court: Fortifying Global Innovation Rights
Recently, the Supreme People's Court convened a symposium titled "Enhancing Judicial
Safeguards for Intellectual Property Rights in Scientific and Technological Innovation." TheIntellectual Property Court of the Supreme People's Court was inaugurated on January 1,
2019.
Since its inception in 2019 through June 26, 2024, the Intellectual Property Court has
handled 20,338 cases, successfully concluding 17,638 of them. Over the past five years,
approximately 10% of new cases involved foreign entities, marking a notable annual growthrate of 28.6%. Of particular significance, one-third of these foreign-related cases pertained
to disputes over invention patent grants and confirmations.
For instance, in an administrative dispute concerning the validity of a university's invention
patent in California, the court upheld the validity of the patent holder's drug patent. The
case involved a disagreement between the board of trustees of a California university, the
CNIPA (China National Intellectual Property Administration), and a pharmaceuticaltechnology firm in Shanghai. The patent in question pertained to the enzalutamide
compound, primarily used in treating refractory prostate cancer. The university's board oftrustees held the patent and faced a challenge when the pharmaceutical company filed forinvalidation, arguing lack of inventive step—a stance supported by the CNIPA.
Disputing this decision, the university filed an administrative lawsuit with the Beijing
Intellectual Property Court, submitting additional experimental data to substantiate thepatent's inventiveness. Initially, the lower court ruled against the university's challenge.
Subsequently, both parties appealed the decision. In the appellate phase, the Intellectual
Property Court of the Supreme People's Court accepted the university's supplementary
experimental data and affirmed the initial judgment in favor of the university's patentvalidity.
Further information can be found here. (Chinese)
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4. CNIPA Reports: China Leads Global Generative AI Patents Surge
According to a report published by the World Intellectual Property Organization (WIPO) on
July 3rd, China has emerged as the global leader in generative AI patent applications,surpassing 38,000 filings from 2014 to 2023. This figure stands six times higher than thatof the United States, which holds second position.
The WIPO Patent Landscaping Report on Generative AI reveals a total of 54,000 global
patent applications over the decade, with more than 25% of them published in the last year
alone. Since the introduction of deep neural network architectures in 2017, pivotal to large
language models, generative AI patents have grown seven-fold. These innovations spandiverse sectors including life sciences, document management, publishing, businesssolutions, industrial manufacturing, transportation, security, and telecommunications.
Patents related to generative AI are predominantly classified under image and video data
categories, followed by text and speech/music domains. Leading the charge in patentfilings are Tencent, Ping An, Baidu, the Chinese Academy of Sciences, IBM, Alibaba Group,
Samsung Electronics, Alphabet, ByteDance, and Microsoft. Besides China, top countries
contributing to generative AI patents include the United States, South Korea, Japan, andIndia.
Interestingly, OpenAI, highly regarded for its advancements, notably does not feature in thelist of patent applicants. Until early 2023, OpenAI had not submitted any patents, possibly
due to its initial nonprofit roots evolving into a "capped" monetization model. Alternatively,
OpenAI might be safeguarding its intellectual property through trade secrets.
Further information can be found here. (Chinese)- Latest IP News in Japan 1. IBM Settles Patent Lawsuit Against Rakuten Over E-commerce Technology
Reuters Japan, June 18, 2024
On the 18th of June, Reuters Japan reported on IBM settling a patent lawsuit against
Rakuten over e-commerce technology.
IBM initiated legal action against Rakuten in 2021, claiming that Rakuten had violated its
patents concerning technology crucial for offering cashback services on its e-commerce
platform and mobile application. The lawsuit was filed after six months of unsuccessful
negotiations between the two companies. IBM accused Rakuten of using its patented
technology without authorization.
The legal dispute between IBM and Rakuten progressed to the U.S. District Court for theDistrict of Delaware. Recently, court records revealed that both parties reached asettlement agreement to resolve the lawsuit. The judge overseeing the case commented
positively on the parties' decision to settle.
Despite the confirmation of the settlement through court documents, neither IBM nor
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Rakuten provided additional statements or comments regarding the terms or implicationsof the agreement. Both companies remained silent beyond acknowledging the resolution of
the lawsuit.
The outcome marks the end of a legal battle where IBM sought to protect its intellectual
property rights against Rakuten's operations in the e-commerce sector. Settlements in suchcases typically involve terms that resolve the legal dispute while potentially involving
financial compensation or licensing agreements. However, specific details of thesettlement between IBM and Rakuten were not disclosed in the article.
Further information can be found here. (Japanese)
2. Automotive Industry Groups Challenge Avanci Over 5G Patent Licensing Terms
Nikkei, July 19, 2024
On the 19th of July, Nikkei reported on several automotive industry groups challenging
Avanci, a US-based patent pool, and its approach to licensing essential patents for 5G
technology used in connected vehicles.
In a coordinated effort, six leading automotive industry associations have publicly
challenged Avanci's methods in negotiating licensing agreements for 5G technology
patents. The core of the dispute lies in Avanci's proposed licensing fees, set at $32 pervehicle, which the industry groups find exorbitant and poorly justified. They have demandedclarity on several key aspects of Avanci's operations, including the specific patents covered,criteria for determining essentiality (Standard Essential Patents or SEPs), and themethodology used to calculate the licensing fees.
Avanci, in response to the industry groups' queries, expressed surprise and defended its
practices, citing prior engagements with many automakers who have already madedecisions regarding patent usage. The organization emphasized its commitment totransparency but did not provide detailed answers to the specific concerns raised in theletter.
This controversy underscores broader tensions within the automotive industry regarding
the fair and equitable access to essential technologies, particularly as vehicles become
increasingly connected and reliant on high-speed data transmission capabilities. The Japan
Automobile Manufacturers Association (JAMA) underscored the importance of clarity andfair conditions in Avanci's licensing program, expressing hope for a resolution that ensurestransparency and supports innovation in the automotive sector.
The standoff between automotive industry groups and Avanci highlights ongoingchallenges in managing essential patents for critical technologies like 5G within the global
automotive ecosystem. As negotiations continue, stakeholders seek clearer guidelines andfair terms that accommodate both innovation and market competitiveness in the rapidly
evolving automotive landscape.
Further information can be found here. (Japanese)

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- Latest IP News in China 1. China leading generative AI patent applications, UN reports
The Japan News, July 4, 2024
On the 4th of July, The Japan News reported that China leads the world in generative AI
patent filings, with over 38,200 patents from 2014 to 2023, significantly outpacing theUnited States, which has nearly 6,300, according to the UN's intellectual property agency.
Generative AI, used in tools like ChatGPT and Google Gemini, accounted for about 54,000
inventions in the past decade, with more than a quarter emerging in 2023 alone, reflecting
the technology's rapid growth.
While China dominates patent filings, the U.S. excels in developing cutting-edge AI systems
and AI foundation models, leading in private AI investments and new AI startups. Critics
express concerns about generative AI's impact on jobs and intellectual property rights.
Despite the high number of patents, the quality and future value of these patents remain
uncertain. The report underscores the rivalry between the U.S. and China in AI development,with the U.S. producing more notable machine-learning models and leading in AI vibrancy
metrics.
Further information can be found here. (English)
2. Qualcomm and Philips sue Chinese smartphone maker Transsion
The Financial Times, July 13, 2024
On 13th of July, The Financial Times reported that Shenzhen-listed Transsion, the world's
fourth-largest smartphone maker, is being sued by Qualcomm and Philips for alleged
intellectual property violations. Transsion, which holds a 48% market share in Africa, faces
growing legal and commercial pressure from major US and European tech companies.
Qualcomm filed a lawsuit against Transsion in India and has also filed claims in Europe andChina over alleged patent infringement. Philips has similarly sued Transsion in India.
Additionally, Nokia is pressuring Transsion to make payments for patented technologies.
Qualcomm’s general counsel, Ann Chaplin, stated that Transsion has declined a licensefrom Qualcomm for most of its products, prompting the litigation to enforce patent rights
and maintain a level playing field for all licensees. Smartphone makers must pay royalties
for patented technologies, and failure to do so can lead to legal action.
Transsion’s low-cost business model has helped it gain market share, with averagesmartphone prices ranging from $110-120. The company expressed respect for third-party
intellectual property rights and willingness to negotiate licenses. Despite signing a 5G
patent license with Qualcomm, Transsion is facing lawsuits from multiple entities, including
a 2019 case by Huawei in China.
As Transsion expands into more affluent markets with stronger patent enforcement,
including parts of Europe and the Middle East, it continues to experience significant growth.
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Further information can be found here. (English)- IP Law Updates in Japan: Insights from Sonoda & Kobayashi 1. Trademarks in the Metaverse: Navigating New Challenges in Japan
Yoko Sasaki (Patent Attorney), Debora Cheng (New Zealand Lawyer)
As the digital landscape rapidly evolves, the metaverse has emerged as a vast, virtual
space where individuals and businesses can interact, trade, and provide services. Thisdevelopment has introduced unique challenges and opportunities for trademarks. Here, we
explore the essential aspects of trademarks in the metaverse, drawing insights from thelatest discussions and examples from the perspective of Japanese trademark prosecution.
What is a Trademark in the Metaverse?
According to the Cambridge Dictionary, the metaverse is "the internet considered as an
imaginary area without limits where you can meet people in virtual reality." In this context,
trademarks in the metaverse can be categorized into three primary types:
1. Trademarks for Digital Goods: These trademarks are used for virtual items that aretraded within the metaverse.
2. Trademarks for Virtual Services: These trademarks are utilized for services provided
entirely within the virtual reality environment.
3. Trademarks for NFT-Related Services: These involve trademarks associated withservices related to Non-Fungible Tokens (NFTs).

It's important to note that the concept of a "trademark in the metaverse" does not have astrict definition and can encompass various other types.
When to File a Trademark in the Metaverse
Companies should consider filing trademarks in the metaverse under several scenarios:
Case 1: Digital Goods
ABC Co., a company that sells bags in Japan, has a popular trademarked bag with the 'ABC'
mark. When XYZ Co., an online event organizer, offers ABC Co. the opportunity to sell virtualbags used by characters in virtual games, ABC Co. decides to file a trademark for 'ABC' in
the metaverse for downloadable virtual bags. This scenario illustrates when a company
files a trademark in the metaverse for digital goods traded in virtual reality.
In terms of whether the trademark holder can take legal action against others who use themark in virtual reality, it is still a new concept, so there are currently no infringement cases
or examples of court precedent in Japan. However, the report on virtual IP rights publishedby the Japan Patent Office states that the trademark right for real goods does not cover thedigital goods in virtual reality, and this is probably why trademark holders of real goods andhttps://mailchi.mp/6d173c6d7363/japan-ip-news-bulletin-17981616?e=76ba65459e

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services are now filing trademarks for digital goods and services in the metaverse.
Case 2: Virtual Services
XYZ Co., an organizer of sports events, plans to host a chess tournament in a virtualenvironment. To indicate their organization of the tournament, they file a trademark forproviding online virtual entertainment in the form of chess tournaments.
In this example, XYZ Co. wants to use their logo in the virtual environment to indicate thatthe tournament is organized by them. They file a trademark in the metaverse for services
provided in virtual reality.
Case 3: NFT-Related Services
J-Bank, an online bank without physical stores, considers offering cryptocurrency
management services. To avoid confusion between their virtual currency services andtraditional banking services, J-Bank files a different trademark for the management ofcryptocurrency authenticated by NFTs. This situation shows when a company files a
trademark for services related to NFTs.
How to File Trademark Applications
When filing trademarks in the metaverse, companies need to designate the appropriate
goods and services. Here are examples for the hypothetical scenarios:
ABC Co.:Class 9: Downloadable virtual bags (Similar Group Code 11C01)
For ABC Co., which already has their trademark registered for actual bags, they candesignate 'downloadable virtual bags' in class 9. In Japan, during prosecution, relative
grounds are examined, meaning the marks are compared to prior filed or registered marks
for similarity. All goods and services are associated with one or more similar group codes
in Japan. Any goods or services associated with the same similar group code areautomatically considered as similar to each other during the prosecution.
For example, the similar group code for 'downloadable virtual bags' in class 9 is 11C01,
which is in the same group with 'computer software; and virtual reality headsets.' Actual'bags' in class 18 have a different similar group code, so 'downloadable virtual bags' will not
be rejected based on prior marks for actual 'bags.'
XYZ Co.:Class 41: Providing online virtual entertainment in the form of chess tournaments(Similar Group Code 41F06)
For XYZ Co., which wants to organize a chess tournament in a virtual environment, they candesignate 'providing online virtual entertainment in the form of chess tournaments' in class
41. The service is considered similar to 'conducting guided tours and party planning[entertainment].'
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J-Bank:Class 36: Management of cryptocurrency authenticated by NFTs (Similar Group
Code 36A01)
For J-Bank, which wants to start cryptocurrency management services, they can designate'management of cryptocurrency authenticated by NFTs' in class 36. The service isconsidered similar to 'banking and exchanging money' services.
In summary, the general classes relevant for trademarks in the metaverse include:
Class 9: Downloadable digital goods
Class 35: Selling downloadable digital goods
Class 36: Activities for cryptocurrency
Class 41: Providing videos in virtual environments
Class 42: Providing virtual environments

Examples of Registrations
Sony Group Corporation:

An example of designating virtual goods in class 9 and virtual services in class 41 is Sony
Group Corporation, a major Japanese electronics manufacturer. Filed on January 27, 2023,
the mark is a company name logo already registered for various goods and services. This
registration is a refiling of the same mark specifically for virtual activities.
In class 9, 'downloadable computer programs, namely virtual goods used online and in
virtual worlds' is designated. In class 41, 'providing clips, pictures, images, animations, andvideos of non-downloadable virtual goods used online and in virtual worlds' is designated.
If the software is downloadable, it should be designated in class 9. If the software is nondownloadable (e.g., subscription services), it should be designated as a service in class 41.
SHISEIDO Co., Ltd.:

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Another example is a logo mark resembling the top half of the sun with a face, filed on
November 30, 2022, by SHISEIDO Corporation, a major Japanese cosmetics company.
The designated goods in class 9 are 'downloadable computer programs, namely cosmetics,
soaps, perfumes used online and in online virtual worlds.' In class 35, 'retail services orwholesale services relating to downloadable computer programs, namely cosmetics,
soaps, perfumes used online and in online virtual worlds' are designated. In class 41,'providing videos and pictures of virtual cosmetics, soaps, perfumes used online and in
online virtual worlds' are designated.
Cosmetic companies have started virtual service businesses to provide information on
makeup and cosmetics use, covered by designated services in class 41.
The same logo mark was registered in December 2019 for cosmetics, soaps, and perfumes
in class 3 (Reg. No. 6203955). This registration is a refiling of the same mark specificallyfor virtual activities.
Ape Foundation:

The last example is the 'APE COIN' trademark, filed in March 2022 by Ape Foundation,
based in the Cayman Islands. 'APE COIN' is a virtual currency managed by Coincheck since
September 2023.
They filed for many classes, but typically trademarks in the metaverse are filed in classes 9,35, 36, 41, and 42.
In class 9, 'downloadable video files authenticated by NFTs' is designated. In class 35,
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'providing an online market in virtual space for buyer and seller transactions of digital
goods authenticated by NFTs' is designated. In class 36, 'trading and exchanging NFTs withother currencies' is designated.
Conclusion
As businesses continue to explore opportunities in the metaverse, understanding andnavigating the complexities of trademark applications in this virtual space is crucial. The
cases and examples provided offer a practical guide for companies looking to protect theirbrands in this new and dynamic environment.

About

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SONODA & KOBAYASHI is a law firm offering

Tokyo:

dependable

Shinjuku Mitsui Building, 34F

legal

servicesforintellectual

property. Our multinational team of about 100

2-1-1 Nishi-Shinjuku, Shinjuku-ku,

experts in technology, law, languages andTokyo, Japan

international〒163-0434

communication

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servedcompanies worldwide and gained a reputation for

Main Line: +81-3-5339-1093

thoroughness and reliability.

newsletter@patents.jp
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